United States dollar
|The dismal science|
|The Worldly Philosophers|
“”The dollar is the weakest currency, except for all the others.
|—That noted commie George Soros|
The U.S. dollar (logographically, $; code: USD) is the currency of the United States, as well as a few other countries such as Ecuador, El Salvador, and Timor-Leste. Additionally, there are several other currencies that have their value tied to the U.S. dollar, such as the Panamanian balboa (which is functionally identical to the dollar) and the Eastern Caribbean dollar (which is set to US$1 = EC$2.70). It has been the de facto worldwide reserve currency since soon after World War II. This international prominence reflected the nation's new-found economic might, due mostly to not having its heavy industry bombed out of existence as was the case with most of the rest of the developed world.
The origin of the US dollar can be traced all the way back to the Massachusetts Bay Colony, which issued paper currency to pay for things like military expeditions. It was named after, and valued upon, the Spanish Milled Dollar, the famous "piece of eight" (so called because one Spanish Dollar was worth 8 Spanish Reals), which contained 0.82 Troy ounces of silver. Note that these "dollars" were called "pesos" by the Spanish who made them; they got the name "dollar" because they were made to the specifications of the Joachimsthaler, a Central European coin the Habsburgs had introduced to Spain in the 16th century. Joachimsthalers were known colloquially as thalers in German, which became "dollar" in English; these Spanish pesos which looked exactly like thalers were therefore called "dollars." If you're wondering why the Americans didn't base their currency on the good old pound sterling, those were hard to come by for reasons to do with mercantilism and the difficulty of travel between Britain and colonial America, while Spain was pumping out pesos like there was no tomorrow from its mint in Mexico City, which flowed into the hands of America's innumerable smugglers.
During the American Revolution, the Continental Congress issued the Continental currency but that succumbed to frequent counterfeiting and poor financial backing. The dollar as a unit for American money was established in 1785 and was made into an organized monetary system seven years later. The greenback paper notes weren't introduced until the Civil War.
The U.S. was on a gold standard through much of its history, but the value of the dollar has thankfully not been tied to gold in any way since 1971. 1932[note 2] was the last year any gold coins were minted for circulation. Since 1963, all paper money issued in the United States has been Federal Reserve notes. Since 1970, no coin minted for circulation in the U.S. has contained any silver. Currently, the dollar is fiat currency.
Coins come in...
- Pennies[note 3] ($0.01) with Abraham Lincoln on them
- Nickels ($0.05) with Thomas Jefferson on them
- Dimes ($0.10) with Franklin Roosevelt on them
- Quarters ($0.25) with George Washington on them
- Quarters with a state-specific image on the back (fairly common)
- Half-dollars ($0.50) with John F. Kennedy on them (uncommon, were not minted for circulation between 2001 and 2021)
- Dollars with Susan B. Anthony, Sacagawea, or the U.S. presidents on them (uncommon in the US, common in Ecuador)
Coins previously in circulation included the half cent, the 2-cent piece, the 3-cent piece, the 20-cent piece, and, prior to 1874, the half dime in place of the nickel. There were also gold coins denominated at $2.50 (quarter eagles), $3, $5 (half eagles), $10 (eagles), and $20 (double eagles). A trillion-dollar coin has also been proposed a few times as a way of dealing with the U.S.'s debt ceiling when Congress is being obstructive, but none have yet been minted. Pennies cost much more to produce than they are worth and rarely circulate due to their low value, costing the government a lot of money, but attempts to stop producing pennies have failed due to the lobbying of the zinc industry.
The Susan B. Anthony, Sacagawea, and Presidential dollar coins represent three (failed) attempts by the federal government to encourage people to stop using the paper $1 bill. Paper dollars typically last 18 months in circulation before they need to be replaced, while coins can last for upwards of thirty years. Other countries (e.g. Canada and the UK) circumvented this issue by just not printing low-denomination paper money any more; the U.S. continued to print $1 bills alongside the $1 coins, and as a result the coins utterly failed to catch on each time. Despite early success, the presidential dollar coin ultimately ended up failing due to an oversight by the U.S. mint. To encorage their use, the mint sold them online with free shipping and allowed use of credit card payments. That was a mistake, as people would buy boatloads of the coins for credit card benefits such as airline miles, and then deposit all of their bought coins back into the bank, preventing the coins from coming into circulation. The U.S. mint shut down this loophole in 2011, and the remaining coins were produced mainly for collectors in much smaller numbers. Ultimately, most of the coins would end up in Ecuador, which also uses the U.S. dollar.
Bills come in...
- $1 with George Washington on them
- $2 with Thomas Jefferson on them (uncommon, but you can ask for them at any bank. Supposedly unlucky.)
- $5 with Abraham Lincoln on them
- $10 with Alexander Hamilton[note 4] on them
- $20 with Andrew Jackson on them. Abolitionist Harriet Tubman will replace Jackson in 2030 or thereabouts, assuming it's not delayed (again).
- $50 with Ulysses S. Grant on them
- $100 with Benjamin Franklin[note 4] on them
After $100, there are/were a number of bills that existed with higher numbers largely for trading large amounts of money.
- $500: William McKinley
- $1,000: Grover Cleveland
- $5,000: James Madison
- $10,000: Salmon P. Chase, last printed in 1945. (Chase was the Chief Justice appointed by Lincoln. He was a member of the Whig, Liberty, Free Soil, Republican, and Democratic parties, in that order. He was also married three times.)
- $100,000: Woodrow Wilson (only traded between banks, never circulated)
As one of the most commonly traded currencies, as well as attracting large numbers of coin collectors, the U.S. dollar has been the subject of many scams to be aware of.
Coins of the U.S. dollar have historically been stored in coin wrappers when they were being traded between banks and businesses. This sparked a wave of "coin rolling" scams, where the coins in the roll will be replaced by lower-denomination coins, slugs, and washers when trading them for the full value in cash. Similar scams have popped up online as well, with scammers selling supposedly machine-rolled coin wrappers that could potentially contain rare coins when in reality they have been tampered with and contain nothing of value. In general, it is recommended that you don't buy coin rolls online and that you should check to make sure a coin roll is legitimate before exchanging it with money.
Many unscrupulous sellers will sell gold-plated quarters or other currency, claiming that it's rare and a good investment. In reality, this is a scam, as these coins are not made by the U.S. mint but are rather modified by third-parties who gold-plate the coins. The layer of gold in these coins is very thin and only worth a couple cents at most, and it would cost more to extract the gold than the gold is actually worth. Gold-plated quarters are truly only worth a few cents above face value, if even that.
President George W. Bush aptly managed the decline of the dollar. Apparently oil-fueled trade deficits and abominably expensive and unnecessary wars weren't a good idea. During his term, the dollar dropped a whopping 41% against the Euro. Heckuva job.
By late 2007, the US dollar had slid to being worth less than the Canadian dollar (US$1.10 = Can $1.00!), and the British pound was back up to US$2.10, from lows in the US$1.50 range in "the worst of times."
However when running up a huge trade deficit, the currency is sometimes devalued on purpose to make exports cheaper for countries buying them in other currencies. This is precisely the thing that hurt Greece the most in the 2010-15 sovereign debt crisis as they – for obvious reasons – could not devalue their currency.
The dollar is an important staple of conservatism. It is a primary factor in the success of large corporations (another BFF) and its unhindered accumulation is a great motive for
corporate abuse economic prosperity.
Not to be confused with
- The Australian dollar
- The Brunei dollar
- The Canadian dollar
- The Cayman Islands dollar
- The Eastern Caribbean dollar (which is actually equivalent to 37¢ in USD)
- The Jamaican dollar
- The Liberian dollar
- The New Zealand dollar
- The Singapore dollar
- The new Taiwan dollar
- The now defunct Zimbabwe dollar
- The Mexican peso, which uses $ as its symbol
- The Philippine peso, which was once produced by the US
- The Panamanian balboa, which is set to be equivalent to 1 USD (Panama uses both currencies)
- That's one story, anyway. See What does the S in the dollar sign represent? on The Straight Dope.
- A few gold eagles were minted in 1933, but they were all seized and melted down shortly after Franklin Roosevelt took office.
- Strictly speaking, pennies are "cents," nickels are "five cent pieces," and quarters are "quarter dollars." Dimes are officially called dimes, though, from the French disme (tenth).
- Neither Alexander Hamilton nor Benjamin Franklin were ever president of the U.S., so referring to paper money as "dead presidents" is somewhat inaccurate.
- Imagining the Dollar Without Its Privilege, The New York Times
- ADVFN: US dollar
- Saving the penny makes cents for zinc-backed front group, Erin Quinn, The Center for Public Integrity 2 July 2014
- U.S. Mint Ends The Dollar Coin “Scam” For Airline Miles, Michael Dolen, Business Insider 22 July 2011
- Are Two Dollar Bills Unlucky?
- Harriet Tubman probably won't be on the $20 bill until at least 2030 — here's why, Michelle Mark, Insider 22 April 2021
- Government source (Yes, the Bureau of Engraving and Printing calls itself the Money Factory.)
- Coin Roll Scam, Scam Detector
- Ebay Roll Scam - How Is This Guy Faking The Wrapper?, Coin Community
- Are Gold-Plated Quarters Worth Anything?, James Bucki, The Spruce Crafts 31 May 2022
- The Nation: Wall Street, Iraq and the Declining Dollar (2007)
- Bloomberg: Bush's Dollar Drop Maps Loss of U.S. Clout at Final G-8 Summit (2008)
- Telegraph: Pound could fall to $1.50, analysts predict